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CAS3
01-28-03, 09:24 AM
Military Capital Gains Tax Exemption: The Navy Times reports that the
Internal Revenue Service (IRS) recently issued a new policy allowing
military personnel who sell a home before living in it for two of the past
five years to qualify for a capital-gains tax exemption. Under the Taxpayer
Relief Act of 1997 military homeowners must live in a home for a minimum of
two years to qualify for a tax exemption of up to $250,000 for an
individual and $500,000 for a couple. However, service members can now
qualify for prorated exemptions without fulfilling that obligation if they
are forced to move 50 miles or more from their residence by government
orders. Exemption amounts will be based on how much of the two-year
residency requirement has been met. The only requirement is that the home
sale must have occurred on or after 7 May 1997, when the law took affect.
Congress considered a bill addressing this tax inequity last year. However,
that legislation, which also excluded from taxation the death gratuity
payment of $6,000; plus monies received under the Military Housing
Assistance Program and other issues, ultimately died in the 107th Congress.
[Source: FRA News-Bytes 9 JAN 03]